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tv   Worldwide Exchange  CNBC  October 17, 2018 5:00am-6:00am EDT

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it is 5:00 a.m. on cnbc global headquarters. here's your five at 5 cluc:00. wall street looking for a mixed open right now after its best day since march. netflix shares soaring as they top expectations in subscribers. president trump calling the fed his biggest threat we'll dig in on his comments ahead. youtube suffering a major outage and then lottery fever even i have it it's the mega million jackpot
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and it swells to 8$868 million what would you do with that money. it's october 17, 2018, "worldwide exchange" begins right now. ♪ >> good morning. welcome to "worldwide exchange." i'm dominic chu. brian sullivan is on assignment. let's check the markets. we'll take a bit of a pause today. we took a 547-point rise yesterday for the dow. the s&p opening up by just about 2 points the dow jones off by 60. the nasdaq off by 45 thanks in large part to those netflix earnings results on the treasury side of things, we're seeing action play out there. the ten-year u.s. treasury note just a tick higher, 3.165% the two-year note, 2.87% netflix shares are shooting higher big earnings beat. we'll have more on that coming up you can see there 12% gains in the premarket so far
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that means, by the way, netflix will have more than halved its peak to trough losses daughter thag la during that period asia is showing a sign of life here the nikkei up by 1.3%. the shanghai up a half percent there. on the european side of things, we're seeing some positivity in the marketplace. it has slowed down a bit the dax is off a bit the cac is up as well as the ftse 100 in the uk outside of stocks here is a global look at commodities and currencies for wti crude, $72.10 the euro versus the u.s. dollar. dollar strength there. 1.1560 is that trade comex gold flat. and bitcoin spot trade,
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6,441.96 let's talk more about wall street's big move higher joining me is mark avalone mark, it sure seems like this was a very v-shaped bottom should we believe the bounce that we saw for the mangjor markets yesterday? >> it's a continuation of the trend. little jitters like last week and sharp downturns and mini corrections are normal in bull markets. people still remember the ghosts of 2008. they think is this it? is this the big one? all they need to do is continue to look at the earnings reports. we saw a lot of earnings reports yesterday that were terrific those won't stop so i think the bull market is continuing sure it's long in the tooth, that does cause some concern but the underpinnings for the sound economy and strong earnings are here. we don't see that changing >> so, mark, as we talk about these strong earnings, we are expecting 20% plus earnings
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growth again maybe around that 7% to 9% sales growth is that enough in a market that sits close to record highs to continue this bull run that we've seen all the way back to 2009 >>. >> it's an expectations game a lot of the good news is behind it, and how do we have that continued earnings growth rate next year? we may need another catalyst we don't know if we'll have an end to the tariff talk or if we'll get an infrastructure spending bill. if we get another catalyst for next year, we could see a move like this.wise moves up in sing digits is nothing to sneeze at >> is the economy strong enough. we mentioned earnings. the backdrop for corporate earnings is good multi-decade low at unemployment everybody seems to be working. the macro economic picture is
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solid but not gang busters is that good enough to keep this environment going? >> it's enough to keep a slow, steady upward trend with interim volatility like we saw this week the consumer is strong debt levels are down relative to 2008 earnings growth is approaching 3% year over year. the job market is tight. ask any employer looking to hire people what they're having to pay relative to previous years, they'll tell you it's a tight job market none of that are underpinnings for an economic recession, and recessions and the fed are two reasons to worry about stocks. right now the fed is talking tough, but it's measured hikes and the recessions are not in the cards. so we think this could continue into 2019. >> it's fair to say you're bullish. we saw bullish price action yesterday in certain sectors and industry groups. i think mainly large cap technologies, semiconductor stocks and social media stocks that have been beaten up
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are there opportunities that are more attractive to you >> the markets are rewarding top line revenue growth and they're punishing slow growers look at the disparity between netflix and ibm yesterday. that's all you need to see between new tech and old tech. the market wants to see revenue growth where the money is also going are value stocks i think you'll see a slight rotation into some of the financials if we have a strong economy like i think we do there's no reason for financials to be wallowing at these levels. we think the earnings reports justify a little more attention to them. >> seems like it always comes back to tech and financials. mark avalone, thank you very much for joining us. in earnings news, netflix shares rocketing higher. the company topping expectations thanks to a big jump in subscribers. let's bring in richar richard broughton.
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a 12% gain for a company as large as netflix is nothing to shake a stick at is the move worth it we know that netflix has been a big underperformer since its record highs is this a good reason to get back into the stock the numbers we saw yesterday >> so, netflix as a business is entirely predicated on growth, though nomally is looks good, and if net needs to keep growino justify its existence and the markets are reacting to that >> international subscriber growth accounted for the vast majority of what happened with netflix. they are also focusing a lot more on international or global original content versus just in the u.s. how big is that original content push going to pay off for them down the line? >> yes that's where a lot of that cash
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is going now originals give them two elements to the business. one is security from competition. we've seen moves from the big studios to drive their own direct to consumer plans so disney, fox and warner. and while individually they won't make much of a difference to content suppliers to netflix, in aggregate if we see a range of content distributives following suit, netflix needs that stable of originals so it can secure the future of its streaming business from a security standpoint, very important. also from a localization standpoint very important. they don't have to rely on international content producers to fuel the content boom in many high-growth markets. >> richard at one point over the last few months netflix lost around a quarter of its market value. there's got to be a reason why there was concern about growth while we know today's story is bullish, are there concerns that
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you have about netflix's stock even though we're seeing a 12% gain premarket >> the one concern i would raise for netflix is that much of that growth is now driven by increased marketing costs. if you look at their marketing expenditure, while it has not doubled year on year, it has increased substantially. so they're paying well over $100 per net new paying subscriber in the u.s. while it's less internationally, it's still increasing. that marketing budget is working harder and harder. >> of course we're not even talking about the cash burn elements yet the story is bullish richard, thank you very much for that netflix update. >> thank you >> we'll watch those shares closely. we're continuing to follow a developing story out of the middle east. secretary of state mike pompeo arriving in turkey a short time
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ago. he's holding talks with that country's president. his visit comes as pressure from the business community mounts on saudi over the jamal khashoggi issue. hadley gamble has the latest what can you tell us >> good morning. so let me quickly walk you through what we heard from turkish officials including the president over the last 24 hours or so. they say they found evidence inside that istanbul consulate that showed that areas had been painted over there was a scrub job done on that building. they also have said that they are releasing the names and passports of 15 saudi nationals that they say were involved in this incident. and of course there continues to be media reports about potentially audio recordings showing how mr. khashoggi met his fate it's interesting to note those audio recordings still have not been released to the public. the saudi officials that we've been speaking to and they've
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said the investigation is ongoing. let's listen to what the secretary had to say on the tarmac as he was leaving riyadh earlier this morning for turkey. >> they told me they would conduct a thorough, complete, transparent investigation. they made a commitment to hold anyone connected to any wrongdoing that may be found accountable for that, whether they are a senior officer, official they promised accountability for each of those persons who they determine as a result of their investigation deserves accountability >> including a member of the royal family >> they made no exceptions they were clear. >> the secretary of state essentially saying this is a situation that deserves accountability and that the saudis have assured them they will go after anyone who was found to have been involved in this incident, even if it goes straight to the top and a member
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of the royal family. that's very interesting. if we kick that can further down the road and lock ok at what wi happen next. the saudi/u.s. relation is important for what they hope happens in this region there are conversations happening on the soud liideline what will happen nextnext, if we will see movement on riyadh or qatar. christine lagarde is the latest to drop out of this davos in the desert summit. but everyone saying on the ground that this is an investigation that is ongoing. we'll bring you more as we have it >> hadley, you mentioned the importance of the u.s./saudi relationship what is the context or the relationship between turkey and saudi arabia given this investigation that's happening on turkish soil?
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>> it's interesting. over the last several years in particular president erdogan made moves to try and be a regional leader. he's found push back not just from egypt, but saudi arabia and jordan this is over the last several years with regards to what we saw with the muslim brotherhood happening in egypt president erdogan was a supporter of not only the muslim brotherhood in egypt but also a supporter of qatar we've seen that major diplomatic rift ongoing between saudi arabia and other gulf states and qatar. so it's interesting to note we've seen a conversation being had between king salman and president erdogan, and it will be interesting to see how this plays out. certainly saudi arabia but turkey more so has a lot to gain from having the upper hand over that saudi relationship. >> hadley gamble, thank you very much for that update
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still ahead, a major outage. youtube going dark overnight we'll have those latest details ahead. plus an earnings bonanza a wrap up of the top movers. orwi ehath us. "wlddexcnge" will be back after this break. there are so many toothpastes out there which one should i use? choose one that takes care of your gums and enamel. crest gum & enamel repair cleans below the gum line and helps repair weakened enamel. gum & enamel repair, from crest. ignition sequence starts. 10... 9... guidance is internal. 6... 5... 4... 3... 2... 1...
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unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back to "worldwide exchange." here's how your money and investments are setting up for this trading day stock futures showing what could be a pause in trading action
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the dow jones opening down by 59 points after a massive 500-point move to the upside yesterday the s&p just about flat. the nasdaq up by 44 thanks in large part to netflix's results. let's check the top stories and stock movers contessa brewer has those. >> we're talking about big blue, railroads and the friendly skies. ibm's earnings beat forecasts but the company says there are signs demand is recovering but shares are down almost 5% this morning. united reporting better than expected third quarter results and the airline is raising its profit forecast for the year higher fares and cost cuts hurt surging costs. right now united shares are up almost 6%. don't miss oscar munoz on
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"squawk box" today. csx's late effost earnings d forecast and they are raising revenue for the year the company benefitting from cost cutting and for higher prices for shipping freight. shares up about a half percent >> contessa, thank you very much for that in other corporate news, google's youtube suffering an outage overnight users were unable to access the website for more than an hour. they were greeted about a blank page that did not show any videos users on the youtube app also received similar error messages. youtube acknowledged the outage and fixed the problem. shares of alphabet, as you can see there, up by almost a percent in the early trade following yesterday's big gains for the nasdaq uber is reportedly in talks to spin off its self-driving car unit the "the financial times" says the company is considering selling minority stakes in its advanced technologies group as uber tries to cut costs ahead of
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a potential ipo. "the financial times" says in a spinoff uber would still keep a majority ownership stake of that serve-driving car unit uber has not commented on the ft story. and switching gears, one of america's biggest bankers says he is bullish on the u.s. consumer here's what brian moynihan told our own becky quick at cnbc's net-net event last night >> in the third quarter u.s. consumers at bank of america spent 7$700 billion of cash checks written, et cetera. that was up about 8%, 8.5% from last year. so consumers are spending and it's accelerating and it's been accelerating consistently. that's good news at the end of the day the u.s. economy is excise, if u.s.
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consumers are spending, all your companies will get incremental receipts somehow that's good. >> you can read more of moynihan's comments on cnbc.com including his take on the jobs market coming up, a make or break moment for brexit. a high stakes eu summit kicking off in brussels. there's a lot on the line for theresa may. willem marx is there with the latest >> that's right. the british prime minister's brexit plans face a lot of op s opposition at home and abroad. she will have to find an answer toerst psient questions about the uk's relationship with the rest of the world. more details after the break
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we're drowning in information. where in all of this is the stuff that matters? the stakes are so high, your finances, your future.
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how do you solve this? you partner with a firm that combines trusted, personal advice with the cutting edge tools and insights to help you not only see your potential, but live it too. morgan stanley. well, it is a make or break moment for brexit negotiations a major eu summit kicking off today in brussels. willem marx is there he joins us with the latest. what can we expect here with this particular meeting kicking off? >> well, the ministers from the various leaders from the 27 european nations as well as theresa may will get here this afternoon. they'll be having a conversation as a group she'll be addressing them this evening before dinner about her latest proposals on brexit they'll then be sitting down for dinner to talk about their own
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views and reaction to what she said the challenge coming into this meeting for theresa may has been that the negotiations essentially ended on sunday. both sides unable to get past a certain point. the sticking point seems to still be around what to do with the border on the island of ireland between the uk, northern ireland, and the republic of ireland. they cannot agree on whether there will be a permanent insurance policy in case next year, when trade negotiations start after brexit's formal end date which is the 29th of march 2019, they cannot agree on whether the insurance policy around having no infrastructure on that border, allowing free trade on that border whether that insurance policy will be permanent. the brits do not want it to be permanent. the irish and the europeans saying they need it to be permanent otherwise it doesn't work as an insurance policy. >> as we talk about what we can expect this idea of a hard or soft border with ireland and the republic of ireland, northern ireland, it's interesting only
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because it's not just about the trade side of things it's also about the policing of it, right? it's not just the idea this is a trade zone there's also a security issue as well, right? >> that's the historical context for this after the good friday agreement both sides said we do not want to have security infrastructure on this border which was a target for militant groups on both sides of the border so this is something they're trying to avoid. both sides have said we do not want to see a hard border with that kind of infrastructure. if we end up with no deal, if these negotiations fail to get past the current sticking point, we'll end up with that hard border any way >> willem, a lot of stuff to go over here. theresa may has a lot to work on tonight. thank you, willem marx. let's check the other top headlines. phillip mena is in new york with those details. good morning the texas governor is declaring a state of disaster in 18
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counties after rains sparked heavy flooding across the central and southern portions of the state. so far authorities reported one death. and near austin a school bus was swept away after trying to cross a flooded road one student on board was rescued. the driver was charged with endangering a child. overnight an atlas five rocket successfully launched from cape canaveral with a satellite on board it will provide secure connectivity between u.s. leadership and u.s. forces and chubbs, the 15-foot alligator is back. the giant gator freak whens a golf course in palmetto, florida. officials say chubbs doesn't bother anyone and they don't bother him why would you? >> he's bigger than the gator from happy gilmore for sure.
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>> like a dinosaur >> thank you very much still to come on this show, trading the rally. what's next for your money after wall street posted its best day in seven months. we'll debate that. and later flying high. our neighbors to the north officially legalizing recreational marijuana there's a lot of money at stake. we're live on the ground in canada when "worldwide exchange" returns. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? cascade platinum does the work for you,
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easy come, easy go the dow pointing to a triple digit drop at the open after posting one of the best days in months crude alert. oil prices moving higher as pressure mounts on saudi arabia. we'll find out where energy prices are headed. and it's mega mania. lotto fever sweeping across the nation as mega millions and the jackpot grows to the highest level ever it's wednesday, october 17, 2018 you are watching "worldwide exchange" on cnbc. ♪ >> good morning. welcome to "worldwide exchange" on cnbc. i'm dominic chu. brian sullivan is on assignment today. let's have a recap of the stories making headlines contessa brewer has that shares of netflix are surging after the latest earnings
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report the streaming giant passed estimates adding 7 million new subscribers. google's youtube suffered an outage overnight users were not able to access the website for more than an hour they were greeted with a blank page that did not show videos. i guess we got more work done? got more sleep users also received error messages youtube said the problem is fixed. mike pompeo arrived in turkey a short time ago. he's holding talks with turkey's president and there to find out what happened to missing saudi journalist jamal khashoggi we'll continue to monitor this story and bring you the latest details as we get them in. dominic? >> thank you very much for those details. let's turn back to the markets following yesterday's big move higher the dow was up by over 500 points. >> right now it's indicated to open down by 90 points the s&p just about flat as well.
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the nasdaq showing some outsized gains thanks in very large part to a blockbuster earnings release that contessa talked about. up about 37 points for the nasdaq joining me now to talk about the overall markets is jurrien timmer from fidelity thank you very much for joining us here. are things as good as they would seem to be after yesterday's nice little market rally >> well, i think it's important to take a step back and kind of take the context of yesterday also last week and really the last nine months, the market basically has gone sideways for nine months. it peaked in january fell 11.8% on an intraday basis. came roaring back in recent months, made a new high at about 2940 on the s&p and last week, of course, was a violent selloff. yesterday it came back but when i put the pieces of the
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puzzle together, it really paints a story where, you know there are cross currents generally when there's cross currents the market doesn't make a lot of gains the cross currents are that earnings as we know are growing very strongly. they're booming. but they're also probably peaking here on a rate of change basis. certainly not on a level basis and interest rates, of course, are rising the cost of capital is going up. and when you combine those two factors, they make up the numerator and the denominator of the discounted cash flow model the perfect scenario is where earnings are growing and interest rates remain low, that causes pes to go up against a back drop of rising earnings it makes prices go up a lot that's what we've seen until this year. so the goldilocks scenario this year we're seeing something different. it's not the end of the world. it's not a bar mbear market.
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the markets and investors may be worrying the best is behind us in terms of earnings last week was about that we had a few publicized misses on the earnings front in recent weeks or lower guidance. and i think generally people were worried that this is as good as it will get. some earnings announcements have alleviated those fears we'll have to see how third quarters earning season comes out. if there are concerns about trade or rising labor costs, we should probably start seeing those come out of the earnings releases that's kind of where people are holding their breath i think yesterday was a sigh of relief that so far that is not happening and that earnings are coming in very strongly yet again at around 20% with over 80% of the companies beating
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this week and next week will be huge weeks in terms of the number of companies reporting. >> is the u.s. strength of the economy, is the u.s. strength of the earnings picture, is the u.s. strength overall enough to keep global markets buoyed or stable in the coming weeks or months >> you do need the global economy to follow suit china is very important. europe is doing pretty well. japan is doing very well but the chinese economy has slowed china just lowered the receive requirement ratio yet again by 100 basis points the problem with china is the economy has slowed, it's still growing, but it has slowed china with its currency linked to the u.s. dollar essentially is importing u.s. monetary policy and of course u.s. monetary policy has been on a tightening mode or a normalization mode as the fed would call it.
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and so there's a conflict there. that speaks to the larger divergence that we see globally where the fed is tightening, the ecb, the bank of japan, the peoples bank of china are still in easing mode the ecb is trying to sort of get to the exit on i sidts side. when you have policy divergence like that it leads to a higher dollar because the dollar reflects interest rate differentials. that tightens liquidity and that affects how things work in the market that's why we have this gap in terms of performance i think we need china to recover, which may be a 2019 story, but certainly having the u.s. economy running hot here is a big help for the global economy given how big the consumer is in the u.s >> sounds like the bullish
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narrative is intact but still clouds on the horizon. jurrien timmer, thank you very much for joining s . >> let's see what else you will be talking about today time for the top trending stories. contessa brewer has those. what would i do with a lotto jackpot? i can't count the ways >> isn't it impossible not to imagine the ways >> $2 and a dream. >> that's what they say. get in there if you're feeling lucky the mega millions jackpot hit a record 8$868 million because nobody ha all six winning numbers in last night's drawing. the jackpot has been growing since july so we're due for a turn of luck. the next drawing is friday if no one wins, probably i will, but, you know, someone will, but if they don't, the jackpot will hit $1 billion >> you remember back in january 2016 when the powerball was
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almost 1$1.6 billion >> yeah. unbelievable >> crazy, right? >> you could do a lot with that. >> i would be charitable, but i would want to -- either pay off my mortgage, get a new house, get a new car, then all charitable >> so modest >> i know. >> i could keep working but be a real diva. >> you would see me at work the next day >> one of the best known figures of nevada has passed away. dennis hof owner of the love ranch brothel died in his sleep we're told he was 72. he is currently on the republican ticket for a nevada state senate seat. it's now too late to replace his name if he were to win the campaign posthumously, officials say they would have to nominate another republican to serve in his place. you might remember that i interviewed dennis hof in may. i went to northern nevada amid a campaign to shut down his legal
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brothels there i interviewed some sex workers there who insisted they were doing this under their own volition, their own choice, pursuing a ph.d. at the same time was one woman i he insisted on having his cigar and holster during the interv w interview. he thought i would protest, i did not. he was a divisive figure in nevada and beyond. he was happy to proclaim himself a pimp >> he even lectured about the subject at higher institutions all over the world >> exactly so this video is going viral online it was something you might be talking about at the office today. watch this ♪ break it down ♪ girls say hallelujah >> you know what's bad when a robot dances better than
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you do boston dynamics released a new video of its robot this one dancing e ing ting to n funk." if they can do that, they should be able to fold laundry. >> i think they should and i'm sure they will in the near future >> all right that's better than winning the jackpot. >> thank you very much now switching gears, canada is becoming the second and the largest country in the world to legalize the recreational use of marijuana. deidre bo deidre bosa has the latest details. >> it's a historic day for canada we're in the most eastern part of the country so we witnessed the first legal sale of recreational cannabis.
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>> three, two, one [ cheers ] >> now lots of excitement in the store and outside as well. there was a line that started hours before midnight. it extended around the block the man behind the register for that very first sale, you might recognize him, that's bruce linton of canopy growth. he flew here from ottawa to make that first sale. the first proud customer was local ian power. >> i'm happy for cannabis users across the country >> now, in a few hours the store behind me will open back up. we're expecting to see more crowds, more celebrations. this is just one of about 100 licensed cannabis stores opening up across the country today with hundreds more expected over the next year. canadian cannabis sales, there's a big business here. they're expected to reach 5
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billion by 2020. the provinces are expected to reap the greatest rewards, estimated 2.3 billion in tax revenues and income. and in the private sector nearly 8$800 million in earnings there are different regulations for different parting of ts of e country and there is confusion about that, and how do you test for impairment do they fulfill demand and get deliveries to peoples doors? these are all the questions we'll be asking today and watching as this grand experiment plays out on the world stage. >> is there going to be a tourism impact for this? could we see people from the united states going up there i was out in nova scotia just last month playing golf. it was a short 1 1/2 hour flight to halifax it's not that much longer to get up to st. john's could we see an influx of tourism because of the legalized use of recreational marijuana?
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>> you could because of the novelty of it. this is the second country to legalize recreational marijuana and certainly the largelargest it is still legal in nine states in the u.s so there is the industry down there, but more reason for people to come up here there are some worries when i talk about border issues, people have to be careful. cannabis is still illegal at the canada/u.s. border if people come up here and decide to partake and buy some they have to be careful about bringing it across the border, particularly for canadian citizens who think this is normalal now they cannot just carry it over >> thank you for that update in newfoundland. coming up, the saudi factor. mounting pressure on saudi arabia weighing on the energy market what geopolitical tension could mean for oil prices and gasoline prices when orwi eha"wlddexcnge" returns. s different,
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the energy markets are on focus. wti crude off by 0.31% $71.69 there this following the disappearance of jamal khashoggi let's bring in the chief oil analyst at energy aspects. as we talk about this diplomatic issue that's developing between possibly saudi arabia and other
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parts of the world, is there a fear that oil prices could be the ultimate way it plays out in the markets? >> i don't think that will be the case first and foremost we don't think the u.s. administration as it is right now is keen on imposing sanctions that said i think congress has been and is serious about doing something. but irrespective of what happens on that front we don't think saudi arabia will use oil as a weapon they have never done that in the past we don't think that e. they wila now either >> the way the issue with saudi arabia and journalist jamal khashoggi is happening, is there something that we should be watching for is there an ultimate winner or loser as this drama continues to play out >> i think the real loser, if you were to put it that way, is
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probably the reform agenda that crown prince mohammed bin salman has in saudi arabia. you have seen a lot of businessmen and investors pulling out of the upcoming conference next week in saudi arabia and just generally that's where the big casualty will lie. a lot of foreign investors are going to not want to associate themselves with saudi arabia so vision 2030 requires a lot of foreign investment that's where the big focus should be. i don't think it will be on oil prices it's a different matter that saudi arabia and a lot of other countries don't have spare capacity in the near-term to offset iran. that's why we expect prices to go up. that's independent of what's going on with the journalist investigation. >> with saudi arabia, is there a sense then of course that they could perhaps go the other direction? is there a reason why saudi arabia wouldn't want to keep oil flowing to take advantage of prices the way they are now given the fact that iran
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sanction also have an effect on the global scene >> no. iranian exports are just starting to fall we have not fallen down yet. november and december are the crunch points. we should be seeing iranian exports below 1 million barrels per day. saudi arabia has every incentive. they have always been the stable supplier of the market i think that will be the case now. they are telling refiners that they are willing to meet the short fall and they have increased production i don't think there will be a change in that and they are gaining from the higher oil prices and they gain from iran's market share i don't think that will be a change in strategy the question is can saudi arabia offset entirely what iran will drop no including russia and uae we will have a shortfall and we could see brent trade at $90 by year end. >> thank you
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>> thank you coming up next, hang on tight. we could be in for a drop at the open following yesterday's mega rally in the stock market. coming up we'll find out wt'has in store for you and your money in the trading day ahead cal: we saved our money and now, we get to spend it - our way. ♪ valerie: but we worry if we have enough to last. ♪ cal: ellen, our certified financial planner™ professional, helps us manage our cash flow and plan for the unexpected. valerie: her experience and training gave us the courage to go for it. it's our "confident forever plan"...
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cal: ...and it's all possible with a cfp® professional. find your certified financial planner™ professional at letsmakeaplan.org. we perform over 50,000 operations a year in places like this. for the past 15 years, chubb has identified ways that we can strengthen our safety measures. and today, our hospitals have some of the best patient safety records in the country. now, we're constructing new buildings
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that will define the future of piedmont and chubb is here, insuring our expansion. two million patients a year depend on us. and we depend on chubb. welcome back to "worldwide exchange." futures losing a bit of steam as we head through the hour the dow jones laslated to open down by 100 points let's bring in david joy i've been told and we've been told all this time over the past couple of days that the bottoming process is a process maybe not surprising to see this here, but can we say it's safe to go back into the markets given what we saw yesterday? >> i think it is no guarantees, but i think it is it seems to me the spaz m spasmt
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went through is getting the market's attention where it didn't before. so maybe stocks were overdone on a relative strength basis they were oversold. it wasn't surprising to get a nice bounce back it is probably likely a bottoming process. i do think stocks have an opportunity to maybe edge higher through the end of the year. what is the primary catalyst for the reason why >> i would say it has to be earnings if you look at the fed, the fet is n fed is not a market concern until next march they are out of the picture as a headwind, maybe. i don't see a lot of progress with china, at least not until
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after the midterms and maybe a long time after that >> the russell 2000 small cap index moved out of that correction/phase that we were talking about, down 10% or more from its highs is it small caps is it mid caps is it large caps where will investors find the best opportunity for gains >> in the coming weeks likely large caps that's where you will see the best earnings growth but maybe longer term from a valuation point of view mauler and mid cap stocks are attractive you want exposure there. so market leadership is likely to be in the large cap names as i said earlier, it will have to depend on the overall strength of earnings 20% is not likely going to get that done. it has to exceed that. that's probably already reflected in prices. we need to see something around 23%, 24% in the third quarter.
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>> are u.s. government bonds attractive with yields this high >> our year-end forecast for the ten-year was 310 so that would tell you the answer is yes. i'm not so sure we have not seen the highs here on a yield basis in the ten-year. wouldn't surprise me if the economic data continues to be strong that it edges higher. on the other hand, there's been no inflationary pressure i don't see that being a big catalyst there either. it's going to have to depend on what happens with wages. so we have a little ways to go before we get the next read there. >> david joy of ameriprize financial, thank you time to find out what's coming up on "squawk box." andrew ross sorkin has a preview. a packed show as always, right >> it's hump day, so on hump days we try to pack it tighter we got earnings alerts going on left and right we were talking ibm, talking
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netflix. we have analysts lined up to walk us through what it means for them and competitors josh bolton will be joining us this morning we'll get into the political dynamics that some ceos are facing regarding saudi arabia and more oscar munoz will be with us from united airlines. and we have a disruptor coming up for a baby food business. the ceo of yummy will join us. that's in a bit. >> a packed show for sure. we'll tune in in about four minutes time thank you very much for that that does it for "worldwide exchange." the futures picture is showing what could be slight losses here at the opening bell. dow down by 96 points. s&p off by 3 points. the nasdaq up by 36 thanks in large part to those netflix results. we'll see if they hold into the opening bell and throughout the course of the day. all of those things in play.
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a big "squawk box" show coming up that does it for "worldwide exchange." we'll have more on the markets y.roughout the course of the da we'll see if the markets can keep going after yesterday's 500-point up day firmness... nine. it's how ibm services helps retailers around the world drive growth and save millions. he's very into this. yeah. is that the standard amount? yes. feels good. when your partners are obsessed with business and technology, you can put smart to work.
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>> netflix shares soaring after posting record subscriber numbers. the stock has doubled since the beginning of the year. and ibm shares are sinking as revenue problems are resurfacing. we'll dig through the numbers. and there are lots of new losers in america. nobody won a 6$667 million mega millions lottery, pushing the jackpot for friday's drawing to an estimated 868 million it is wednesday october 17, 2018 "squawk box" begins now.
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♪ >> live from new york where business never sleeps, this is "squawk box. >> good morning. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. big day for the markets yesterday. regaining a lot of the ground they lost last week. we are back to where we were a week ago with the gains we saw yesterday. this morning, the dow at this point indicated down by 88 points s&p down by over a point and a half nasdaq indicated up by 38 points in asia, the hang seng was closed for a public holiday. the nikkei was up by 1.29% stocks were higher in china, up by 0.60% in europe already this morning you will see at this hour it's a mixed picture there. the dax is down by

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